(1) If any of the provisions of sections 139 to 146 (both inclusive) is contravened, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable 1*** with fine which shall not be less than ten thousand rupees but which may extend to 2[one lakh rupees].

(2) If an auditor of a company contravenes any of the provisions of section 139, section 143, section 144 or section 145, the auditor shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees 3 [or four times the remuneration of the auditor, whichever is less]:

Provided that if an auditor has contravened such provisions knowingly or willfully with the intention to deceive the company or its shareholders or creditors or tax authorities, he shall be punishable with imprisonment for a term which may extend to one year 4 [and with fine which shall not be less than fifty thousand rupees but which may extend to twenty-five lakh rupees or eight times the remuneration of the auditor, whichever is less].

(3) Where an auditor has been convicted under sub-section (2), he shall be liable to--

(i) refund the remuneration received by him to the company; and

(ii) pay for damages to the company, statutory bodies or authorities 5 [or to members or creditors of the company] for loss arising out of incorrect or misleading statements of particulars made in his audit report.

(4) The Central Government shall, by notification, specify any statutory body or authority or an officer for ensuring prompt payment of damages to the company or the persons under clause (ii) of sub-section (3) and such body, authority or officer shall after payment of damages to such company or persons file a report with the Central Government in respect of making such damages in such manner as may be specified in the said notification.

(5) Where, in case of audit of a company being conducted by an audit firm, it is proved that the partner or partners of the audit firm has or have acted in a fraudulent manner or a betted or colluded in any fraud by, or in relation to or by, the company or its directors or officers, the liability, whether civil or criminal as provided in this Act or in any other law for the time being in force, for such act shall be of the partner or partners concerned of the audit firm and of the firm jointly and severally.

6 [Provided that in case of criminal liability of an audit firm, in respect of liability other than fine, the concerned partner or partners, who acted in a fraudulent manner or abetted or, as the case may be, colluded in any fraud shall only be liable.]

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Footnote -

1. The words "with imprisonment for a term which may extend to one year or" omitted by Act 29 of 2020, s. 31 (w.e.f. 21-12- 2020).

2. Subs. by s. 31, ibid., for "one lakh rupees, or with both" (w.e.f. 21-12-2020).

3. Ins. by Act 1 of 2018, s. 44 (w.e.f. 9-2-2018).

4. Subs. by Act 1 of 2018, s. 44, for "and with fine which shall not be less than one lakh rupees but which may extend to twentyfive lakh rupees" (w.e.f. 9-2-2018).

5. Subs. by s. 44, ibid., for "or to any other persons" (w.e.f. 9-2-2018).

6. The proviso ins. by s. 44, ibid., (w.e.f. 9-2-2018).